Market participants believe Hong Kong SMEs and other businesses will likely take a hit from recent damage incurred by the protests, as a result of a lack of purchased protection or sufficient coverage, according to Reuters.

The city is in its fourth consecutive month of demonstrations against the government. Some have turned to violence and have targeted businesses with perceived links to or support for mainland China. Businesses, from large multinationals to SMEs, have been affected by vandalism, destroyed windows, upturned shops and even petrol bombs.

While some businesses will file claims for this damage, civil unrest coverage for Hong Kong SMEs is rare – it’s more common for firms to be protected against events like natural disasters. Most companies in Hong Kong do not have coverage that encompass riots, strikes and civil unrest. The tumult may lead to increased SME demand for protection in these areas.

According to a Marsh advisory issuance in August, SMEs are advised to review their requisite cover, particularly political violence and political risk cover. Marsh noted that some policies have an “absolute exclusion/exception in respect of strikes, riots and civil commotions – the so-called SRCC exclusion.”

With the protests showing no sign of abating, liabilities could add up to millions of dollars for insurers.

A QBE study has shown that 14% of Hong Kong SMEs, which number 47,600 companies, have no coverage at all. Four-in-five SMEs hold coverage plans, but the study notes that these may not provide adequate protection to specific business needs and potential disruptions.